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San Juan County takes step to help Raytheon continue local operations

New warehouse would allow defense contractor to stay in Farmington for three more years

By Ryan Boetel The Daily Times

Updated:
03/18/2014 08:32:33 PM MDT

Raytheon's Diné Facility is pictured on Jan. 6 off N.M. Highway 317 south of Farmington. Officials say the company needs a 28,000-square-foot warehouse to continue its operations. (Megan Farmer / The Daily Times)

AZTEC — San Juan County commissioners on Tuesday took a step toward helping Raytheon open a $3.3 million warehouse on Navajo Nation land.

The warehouse would ensure the defense contractor could continue to assemble missile and munitions parts at its facility near Farmington for at least three more years.

Raytheon's Diné Facility needs a 28,000-square-foot warehouse to continue operations at the Navajo Agricultural Products Industry Industrial Park south of Farmington, said Philip Miller, the facilities manager at Raytheon in San Juan County.

He declined to say why the warehouse is needed.

The Navajo Nation secured the $3.3 million needed to build the facility, San Juan County Deputy Attorney Joe Sawyer said at Tuesday's commission meeting.

In exchange for the new building, Raytheon will keep 42 manufacturing jobs and create two new jobs at the facility for at least three years, Sawyer said.

A $200,000 New Mexico Economic Development Department grant will fund the architecture design for the warehouse.

County commissioners on Tuesday approved a notice of intent to serve as the fiscal agent for the state grant. County officials will take bids for the project before choosing the architect.

Despite having money allotted to build the warehouse, Sawyer said Raytheon and the Navajo Nation are negotiating to extend Raytheon's lease at NAPI.

Sawyer said the timing of the negotiation is crucial because the $200,000 for the architectural work needs to be spent by June 30 or the money will go back to the state.

"The negotiation between Raytheon and the Navajo Nation is very important," he said.

Miller declined to comment on negotiations between Raytheon and the Navajo Nation. He also declined to say when the Diné Facility's lease expires.

The county is only involved in hiring an architect for the project. It won't hire a contractor for construction of the warehouse, according to county documents.

The commission will give final approval on the grant to cover architectural costs next month, unless the tribe and defense contractor can't negotiate a new lease agreement.

Raytheon has operated a manufacturing facility outside of Farmington for 24 years.

The plant in San Juan County builds products for several U.S. Department of Defense contracts using electromechanical assemblies, Miller said. He declined to say what products the company makes in San Juan County.

A 2007 news release on the company's website said employees at the NAPI facility assemble parts for 12 missile and munitions programs for the U.S. Army, Air Force, Marine Corps and Navy.

If operations continue for the next three years, county officials estimate the Diné Facility will generate about $3.5 million per year for the local economy. Of that, $1.8 million will come from the salaries of the 44 employees at $41,280 per employee, and $1.7 million will come from expenses on utilities and support services and money spent at hotels and area businesses, according to county documents.

"If we can make it easier for them to stay here, we should," San Juan County Commission Chairman Jack Fortner said. "I can't imagine losing those jobs."